Gold experienced a significant pullback after reaching record highs, driven by profit-taking and a stronger US dollar. Despite the recent decline, gold remains on track for a substantial monthly gain, supported by ongoing economic and geopolitical uncertainties.
- Gold tumbled more than 5% to around $5,100, triggered by profit-taking.
- Gold previously reached a record high of $5,608.
- Geopolitical risks remain elevated due to US-China tensions and Middle East conflicts.
- Trump nominated Kevin Warsh as the next Fed chair.
- The risk of the Fed losing its independence and prospects for lower US interest rates might support gold.
- Trump’s tariff threats and persistent geopolitical uncertainties weigh on investors’ sentiment, supporting the safe-haven bullion.
- Trump took another jab at Federal Reserve Chairman Jerome Powell, indicating he wants lower interest rates.
- US continues to deploy warships and fighter jets across the Middle East.
- Traders look forward to the release of the US Producer Price Index (PPI).
Recent events suggest a complex outlook for gold. While profit-taking and a stronger dollar have contributed to a price decline, underlying factors such as geopolitical tensions, uncertainty around monetary policy, and potential pressure on the Federal Reserve’s independence continue to provide support. The market will be closely watching economic data releases and policy announcements to determine the next direction for the asset.